Key initiatives in the budget include an extension of the Jal Jeevan Mission until 2028, with a goal of achieving 100% rural water supply coverage and improving the maintenance of existing infrastructure. Furthermore, the Bharatnet Project will expand broadband connectivity to all rural government secondary schools and primary health centres, ensuring better access to education and healthcare.

India Post will be pivotal in the growth of rural economies, offering services like micro-enterprise credit, digital services, and logistics support to entrepreneurs, MSMEs, and self-help groups. This aligns with the government’s push to empower rural communities through greater economic inclusion.

Another significant announcement is the launch of the Rural Prosperity and Resilience Program, which aims to tackle under-employment in agriculture by promoting skill development, technology adoption, and investments. This program is designed to support rural women, young farmers, marginalized communities, and landless families.

The rural development initiatives have already shown considerable results, such as a reduction in the multidimensional poverty rate from 24.85% to 14.96%. Additionally, rural internet users have increased to 398.35 million, while wages have steadily grown across both agricultural and non-agricultural sectors.

In terms of rural infrastructure, programs like the Pradhan Mantri Gram Sadak Yojana (PMGSY) have provided all-weather roads, and the Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) has delivered housing to those in need. The Mission Amrit Sarovar has rejuvenated over 68,843 ponds, ensuring sustainable water resources, while the National Rural Health Mission continues to offer quality healthcare to rural populations.

The Swachh Bharat Mission (Gramin) continues its efforts in the second phase to maintain open defecation-free status and manage waste, contributing to a cleaner, healthier rural environment. Alongside, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has received Rs. 86,000 crore in the FY 2024-25, securing rural livelihoods and providing much-needed employment opportunities.

The budget also emphasizes programs like the Saansad Adarsh Gram Yojana, PM-JANMAN, Deendayal Antyodaya Yojana, and Gram Nyayalayas Act, all of which aim to further uplift rural India. With these initiatives, the government is steadfast in its vision to build a developed and self-reliant India by 2047.

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Chandrajit Banerjee, Director General of CII, emphasized that while India’s growth story has been largely driven by domestic consumption, inflationary pressures have impacted the purchasing power of consumers, especially in rural areas. In response, CII has urged the government to adopt strategic measures to enhance disposable incomes and stimulate consumer spending.

One of the key suggestions from CII is the reduction of excise duties on fuel. The industry body pointed out that the central excise duty, which constitutes a significant portion of retail fuel prices, has remained largely unchanged since May 2022, despite a nearly 40% drop in global crude oil prices. CII believes that lowering excise duties on fuel would not only ease inflation but also put more money in consumers’ pockets, particularly in low-income households where fuel costs represent a substantial part of the budget.

In addition to the fuel excise reduction, CII has called for an increase in the daily minimum wage under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), from Rs 267 to Rs 375, based on recommendations from the 2017 Expert Committee on Fixing the National Minimum Wage. This adjustment would require an estimated additional expenditure of Rs 42,000 crore, but CII argues that it is a necessary step to boost rural incomes and, by extension, rural consumption.

To further support rural consumption, the CII also proposes raising the annual payout under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme from Rs 6,000 to Rs 8,000. The additional funds, CII believes, would help alleviate the financial strain on rural families and fuel consumer spending in these areas.

CII has also recommended a series of measures to address the tax burden on individuals and corporations. The body has suggested reducing the highest marginal tax rate of 42.74% for individuals and aligning it more closely with the corporate tax rate of 25.17%. This move, CII contends, would encourage consumer spending and stimulate economic activity.

In a bid to drive demand in the economy, CII has proposed the introduction of “consumption vouchers” targeted at low-income groups. These vouchers, which would be redeemable for specific goods and services, would be valid for a set period, encouraging spending during a critical time. The vouchers would be designed for Jan-Dhan account holders who do not benefit from other welfare schemes, ensuring that the most vulnerable groups are reached.

Additionally, CII has recommended revising the unit costs under key housing schemes like the Pradhan Mantri Awas Yojana (PMAY), which have not been updated since the schemes’ inception. An increase in the funding for these programs would ensure the continuation of affordable housing construction, an essential need for rural and urban low-income families.

Lastly, in a move to encourage savings, CII has suggested revising tax policies on bank deposits. It proposed reducing the lock-in period for fixed deposits with preferential tax treatment from five years to three years and taxing interest income at a lower rate. This could stimulate the growth of bank deposits, which have been declining as a share of household financial assets.

In summary, the Confederation of Indian Industry’s budget proposals focus on enhancing the purchasing power of consumers, particularly in low-income rural households, while also encouraging savings and investment. These measures, CII argues, are crucial for sustaining India’s economic momentum and ensuring that growth reaches all segments of society.

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